Report documents Ohio's job slide, presses candidates for solutions

Friday

Mar 30, 2018 at 6:22 AMMar 30, 2018 at 6:26 AM

It has been 50 years since Ohio's economic heyday, when the average resident took home an income that matched or exceeded the U.S. average.

Now two Ohio State University researchers have released a three-part study that identifies areas they say could help turn around Ohio's mostly stagnant economy, one that has hemorrhaged manufacturing jobs for years. They want to see these topics addressed during this year's debate in the race for governor.

"No one has been successful in reversing that trend over the long term," said Bill Shkurti, a professor at the John Glenn College of Public Affairs who co-authored the report with Fran Stewart, senior research fellow at Ohio State's Ohio Manufacturing Institute.

Shkurti also served as budget director for Gov. Dick Celeste in the 1980s and spent many years as Ohio State's chief financial officer.

Governors of both parties have tried to turn job trends around, and though some efforts have worked better than others, "Ohio has remained on a disappointing trajectory in terms of both job creation and income growth," their report said.

The report, released Thursday, uses income per person — which includes wages, government benefits and bank interest and dividends — as a key measure.

While that number has improved slightly since 2007, income per person in Ohio was 9.4 percentage points below the U.S. average in 2016, a difference of $4,678 per person.

The last time Ohio's income per person matched the U.S. level was 1968, and the peak was in 1953, when it was 10 percent higher than the national average.

The two want those running for governor to talk about how they would address four of the state's challenges:

• How to create high-wage jobs in industry clusters that can diversify the state's economy and exploit its competitive advantages.

• How to better align the needs of Ohio employers with the skills of Ohio workers, and streamline education and training programs.

• How to improve the lot of workers and communities that have been forgotten in today's economy, such as those in rural areas where factories have closed or those who hold low-skilled, low-wage jobs in urban areas.

• How to develop effective political coalitions to shape federal policies that can help Ohio.

The two have put together a list of 12 questions for the candidates about the economy that cover topics such as taxes, what portion of workers need training beyond high school but less than a four-year degree, and political hot-button issues such as whether Ohio should become a right-to-work state that limits the ability of unions to collect fees from nonmembers.

"Ohio's next governor needs to be prepared to articulate, gain support for, adopt and implement a comprehensive strategy to move the state forward," the report said. "Although understanding the past is important, the governor's vision and actions must not be directed at recreating the Ohio that was, but on building the foundation for the Ohio that can be."

The study documents the job losses in the well-paying manufacturing sector. The state has lost 700,000 manufacturing jobs since the 1960s, about half of the jobs in that category. In 1953, 44 percent of all jobs in Ohio were in manufacturing; today it is less than 13 percent.

The job losses are mostly due to automation: One factory worker can do today what it used to take four workers to do, and today's factories in Ohio are twice as productive with half the workers. Also, jobs have been lost to lower-cost regions such as the South and foreign countries.

The state's big metro areas have been able to offset some of those losses through diversification, but many smaller, rural counties have found it difficult to grow other kinds of businesses, the report said.

Between 1969 and 2000, the state did add 1.7 million jobs, but job growth since then has about stalled, Stewart said, adding those jobs don't pay as well as the ones they replaced.

The decades-long decline has taken a toll on the state, the report said.

"Ohio, once the shining example of middle-class progress, suddenly became known for a much darker reality, as too many of its citizens lost hope for a better life for themselves and their loved ones," the report said.

mawilliams@dispatch.com

@BizMarkWilliams

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